Managing as if Leading

“A winning culture is one of engagement and individual contribution to an important mission and purpose. Human beings are not looking for company-bought goodies — they are looking for meaningful, fulfilling work. It is the new great global dream — to have a good job, not a free lunch. The dream is to have a job in which you work for a great manager; where you constantly develop; and where you can use your God-given strengths every single day.” ~ Gallup Chairman and CEO, Jim Cliffton, June 2014

The Meaningful Firm

In one of my recent meaningful purpose leadership workshops a participant called me aside and asked me – “If according to the experts the state of leadership is so dismal – why are so many companies profitable?” I answered that, as a rule, financially successful businesses are well-managed, and that there are individuals in many firms who practice excellent leadership. Within this group of profitable organizations are meaningful purpose firms – such as Southwest Airlines, Starbucks Coffee, and the Kyocera Corporation in Japan – which have altruistic agendas, and as a rule lead people and manage business processes well and wisely. Their leaders are capable of creating visionary and transformational work cultures that attract and grow individuals who — like themselves — are both smart business people and humane leaders. Their competitive edge is the product of being business savvy and caring. These firms are led and managed to benefit society first and foremost. As a result, they are able to build strong customer loyalty. Their leaders pursue serving people – all stakeholders alike — and profit ensues.

Meaningless Firms

There are also firms that do well, but that are not raising up to their potential because of a number of factors – such as their people practices that result in the employee engagement problem. Some of the firms that meet this criterion mean well, and want to do the right thing, but they are trapped by a business model and managerial paradigm that blinds and hence prevents them from improving. They generally manage as if they were leading. Their difficulty could be because they have not come to terms with their principles and value system. For instance, we have found that the principles and values of the meaningful purpose leadership approach previously referenced does work. You can beboth humane and very profitable. Yet, despite proven models for success, and the availability of transformational approaches, for some there is a fear to let go of the status quo. Being meaningful by giving preference to people over objects takes courage; being meaningful is not for the fearful and faint of heart. It takes guts to be principled and caring.

“Everything can be taken from a man but one thing: the last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s way” ~ Viktor Frankl

There is another category of firms that are financially successful, have moderate to dismal employee engagement scores, and where the management team doesn’t care to change. What I have noticed is that their management is willing to work at sub-par performance because despite their poor leadership they are still making money. They are not motivated to inject meaningful practices or to try to fix what is not broken (i.e., profit). They are driven by greed, not what they would consider “touchy-feely” practices; — and by the way – many of these managers are not offended being called greedy. I made reference to this type of leadership in my previous blog, Leadership Déjá Vu[1]. Researchers Tracy and Robinson (2004)
define these types as narcissists who link their self-centered world view with emotions of pride. It has been labelled as narcissist esteem. “But can these types see the light?”, you might ask. Well, you have probably heard the very fitting joke, “How many psychologists are needed to change a light bulb? One; but the light bulb must want to be changed.” The same applies here. To improve, one must want to change. These managers have a choice to make; and it is their prerogative, as free-willed agents, to act and manage as they wish, as long as it is legal. Based on the previous descriptions, I define meaningful purpose organizations as firms that are business savvy and altruistic. Meaningless firms, on the other hand, are organizations that can’t or choose not to be both business-savvy and altruistic.

Motivation Economy®

Based on my experience and findings from research, there are some common denominators that help to distinguish the practices of meaningful and meaningless firms. I will expand this concept in my upcoming book on Meaningful Purpose Leadership but, for now, there is space for only one denominator, which I call the Motivation Economy®. Most people are aware of the two types of motivation, extrinsic and intrinsic. Motives are hypothetical constructs that help explain why people do what they do. Motives prompt people to act in a certain way for some sort of benefit or reward, as well as to avoid punishment or a loss. Motivations are extrinsic when they come from the outside. Extrinsic motivations come from two sources. The first is an external force that incents us to behave in a particular way (Think of the famous carrot and stick approach). The second is known as an introject, which is an external motive forced into the subconscious of the personality by an external source (most frequently in childhood when it is impossible for the child to exercise choice) and it is falsely expressed as if it was ours. Be it external or introjected, these types of motivation come at a high price.

90% of adults spend their waking lives doing things they would rather not be doing at places they would rather not be. ~ Barry Schwartz, Ph.D.

Introjected motivations, in meaningful purpose psychology, are not intrinsic. Intrinsic motivations refer to behavior that are willed by internal rewards. In meaningful purpose psychology, when we refer to intrinsic motivation, there is no such thing as avoidance and fear of punishment. Rather, there is an inherent positivity and pleasure in the behavior and its outcomes that is reinforcing in-and-of itself. Intrinsic motivation is willed (wanted) versus driven (“have to” and extrinsic). It must be said that there are occasions when results achieved through extrinsic means can provide pleasure, delight and pride on the accomplishment. With these definitions, let’s take a quick look at how the different types of motivations are present in the firms I previously covered.

Managing as if Leading

A common denominator of meaningful purpose firms is that they have a reasonable balance between intrinsic and extrinsic motivators. Meaningful purpose firms, based on our findings, create conditions where employees don’t need to be extrinsically motivated because they find what they do and how they do it intrinsically enjoyable. They are in “a state of flow”, as expressed by psychologist Mihaly Csikszentmihaly in his book, Flow. These cultures are generally inclusive, caring, open minded, creative and profitable. On the other hand, extrinsic motivation practices are generally saved, for instance, to entice retention – as in the offering of employee benefits – or to meet what Abraham Maslow called the basic physiological and safety needs of people; and what Frederick Herzberg called hygiene factors. The problem starts when management tries to motivate behavior with extrinsic factors in what Maslow called “growth needs” or esteem and self-actualization. Our research at The Boston Institute for Meaningful Purpose has led us to conclude that for “growth needs” it is best to create conditions for intrinsic motivation to thrive; and to avoid at all cost the intrusion of extrinsic factors. We call the practice of creating intrinsic conditions “allow“.

Meaningful purpose leaders trained in meaningful purpose psychology leadership methods are aware that the misapplication of extrinsic motivation can actually have an adverse effect on performance. [2] Firms that are mostly driven by extrinsic motivation manage through the carrot and stick approach. For instance, the failed practice of force ranking reviews when doing performance appraisal is a case in point. Even General Electric, who became a promoter of the system, has abandoned the practice. Back in the 60’s Douglas McGregor dubbed this and similar practices as Theory X [3]. It is amazing how leaders in corporations from around the world persist on managing their organizations under Theory X management practices despite the fact that the approach is archaic and discredited. This should teach us a lesson: Rushing to follow the flavor-of-the-month theory or approach without rigorous testing — such as those available in the field of psychology, including meaningful purpose psychology — is unwise.

Mishandling Motivation

We believe that mishandling extrinsic motivation is an attempt to sway under the assumption that people need to be managed. We further believe that the misuse of extrinsic motivation dehumanizes people — and unfortunately it happens too frequently. The more we use extrinsic motivational practices the higher the risk of treating people as objects (res) rather than as humans. Extrinsic motivation is oriented to get someone to go after a price. And there are examples where pursuing such a price comes at the expense of being humane. This problem is the result of a fundamental erroneous belief system of what it means to be a human being, and why and how humans can be their best. Unless those erroneous beliefs (as in the case of Theory X) change, the engagement problem in organizations will persist. In contrast, intrinsic motivation generally brings about successful outcomes because the person innately “wants to” accomplish something meaningful. With the right level of competence, individuals and firms can be both profitable and people sensitive.

In summary, it is possible to make money at the expense of humane practices; as it is possible to be both financially successful and humane. Meaningful and meaningless firms operate in the same market conditions. Hence, selecting the meaningful or the meaningless paths has nothing to do with the market’s conditions; rather, it has to do with a combination of business competence and the moral fiber and operating principles of leaders within organizations. We all have a choice. If you supervise others, what is your choice — lead or manage people?

“It is not freedom from conditions, but it is freedom to take a stand toward the conditions.” ― Viktor E. Frankl

If you as a leader and members of your firm would like to implement meaningful leadership practices for profit and for people, please contact us through the Boston Institute for Meaningful Purpose’s web page (www.bostonimp.com); and through this blog (http://authorluismarrero)